China's central bank on Thursday unexpectedly cut lending rates by 0.2% to 2.30%. The agency issued a 200 billion yuan ($27.5 billion) loan at this interest rate.
This is the second surprise about China's monetary policy this week. Previously, PboC announced a reduction in interest rates on July 22, including the 7-day reverse repo rate from 1.8% to 1.7%, to increase support for the economy. .
This information is considered to be putting pressure on market sentiment, including metals .
Gold prices plummeted amid a global stock sell-off. On Wednesday session, the two US stock indexes S&P 500 and Nasdaq dropped the most in 2 years after reporting disappointing second quarter business results of two large-cap technology companies, Tesla and Alphabet.
On the morning of July 25, Asian stocks were also "on fire". At 10am (Vietnam time), the Australian market decreased by 1.2%; Japan decreased by more than 2.5%; South Korea decreased by 1.8%... Some experts say that investors may be selling gold to take profits or compensate for losses in their stock portfolios.
Traders are now waiting for the US Bureau of Economic Analysis to release the personal consumption expenditures (PCE) price index for June on Friday (July 26).
This report is especially important because core PCE is the Fed's preferred measure of inflation. Economists expect core PCE, which excludes volatile food and energy prices, to rise 0.10% month-on-month, up slightly from 0.08% in May.
Previously, the US second quarter GDP report released on Thursday showed an increase of 2.8% over the same period last year, better than the 2.1% increase in the forecast.
This increase could eliminate market rumors that the US Federal Reserve (FED) may cut interest rates at the FOMC meeting next week. The report added a bit of selling pressure to the gold and silver markets.
Key outside markets today saw Nymex crude oil prices rise after hitting a six-week low earlier today and are trading around $78.00/bbl. The yield on the benchmark 10-year US Treasury note is currently 4.235%.
Meanwhile, the USD index is slightly weaker. Recorded at 5:00 a.m. on July 26 (Vietnam time), the US Dollar Index measuring the fluctuation of the greenback with 6 major currencies was at the threshold of 104,155 points.
Technically, August gold price still has a short-term technical advantage. However, this advantage is considered "fading".
As of 5 a.m. on July 26, the world gold price listed on Kitco was at 2,363.4 USD/ounce. Domestically, SJC gold price is listed around the threshold of 77.5-79.5 million VND/tael (buy - sell).
